Starting February 2022, the Philippine Statistics Authority (PSA) released the rebased Consumer Price Index (CPI) for all income households to base year 2018, from base year 2012 as announced in the press release number 2022-01 dated 04 January 2022. The CPI series for all income households for January 2022 onwards will be 2018-based.
A. The Philippines
The Philippines’ headline inflation or overall inflation eased to 3.3 percent in August 2024 from 4.4 percent in July 2024. This brings the national average inflation from January to August 2024 to 3.6 percent. In August 2023, the inflation rate was higher at 5.3 percent. (Table A)
By Region
Among the 17 regions, 16 regions recorded slower inflation rates during the month while one region retained its previous month's inflation. Region I (Ilocos Region) recorded the lowest inflation rate at 1.8 percent while Region XI (Davao Region) recorded the highest inflation at 4.9 percent during the month. (Figure 1)
B. Central Visayas
1. Regional Inflation
Headline inflation in Central Visayas further decreased to 3.4 percent in August 2024 from 4.5 percent in July 2024. This brings the regional average inflation from January 2024 to August 2024 at 3.6 percent. In August 2023, inflation rate was lower at 4.1 percent. (Table A, B, and Figure 1)
1.1 Main Drivers to the Downward Trend of the Regional Inflation
The downward in the regional inflation in August 2024 was primarily brought about by the slower annual increment of food and non-alcoholic beverages at 5.8 percent in August 2024 from 8.6 percent in July 2024.
Also contributing to the downtrend was transport with an annual drop of 5.5 percent during the month from a 2.0 percent annual increase in July 2024. (Table 3)
Slower annual increments were also noted in the indices of the following commodity groups during the month:
a. Alcoholic Beverages and Tobacco, 4.2 percent from 4.4 percent;
b. Clothing and Footwear, 1.7 percent from 1.8 percent;
c. Furnishings, Household Equipment and Routine Household Maintenance, 2.5 percent from 2.9 percent;
d. Health, 3.6 percent from 4.0 percent;
e. Recreation, Sport and Culture, 3.5 percent from 3.9 percent;
f. Restaurants and Accommodation Services, 3.7 percent from 3.9 percent; and
g. Personal Care, And Miscellaneous Goods and Services, 2.9 percent from 3.2 percent.
In contrast, faster annual increments during the month were observed in the indices of the following commodity groups: (Table 3)
a. Housing, Water, Electricity, Gas and Other Fuels, 3.5 percent from 0.3 percent;
b. Information and Communication at 0.6 percent from 0.4 percent; and
c. Education Services, 7.2 percent from 4.9 percent.
Meanwhile, Financial Services at -0.2 percent retained their previous month's rate.
1.2 Main Contributors to the Regional Inflation
The top three commodity groups contributing to the 3.4 percent regional inflation in August 2024 were the following:
a. Food and Non-Alcoholic Beverages with 63.8 percent share or 2.2 percentage points;
b. Housing, Water, Electricity, Gas and Other Fuels with 23.8 percent share or 0.8 percentage point; and
c. Restaurants and Accommodation Services with 9.5 percent share or 0.3 percentage point.
2. Food Inflation
Food inflation at the regional level eased to 6.2 percent in August 2024 from 9.1 percent in the previous month. In August 2023, food inflation was lower at 4.3 percent. (Table 7)
2.1 Main Drivers to the Downward Trend of Food Inflation
The deceleration of food inflation in August 2024 was primarily brought about by the slower inflation rate of rice with 13.0 percent in August 2024 from 19.4 percent in the previous month. This was followed by Fish and other seafood with a faster year-on-year decrease of 6.3 percent during the month from 2.9 percent annual decline in July 2024.
In addition, slower annual increase was noted in the index of Vegetables, tubers, plantains, cooking bananas and pulses at 6.9 percent in August 2024 from 15.5 percent in July 2024.
Moreover, lower inflation rates during the month were noted in the following food groups: (Table 5)
a. Flour, bread and other bakery products, pasta products, and other cereals, 3.2 percent from 3.5 percent;
b. Meat and other parts of slaughtered land animals, 6.1 percent from 8.4 percent;
c. Oils and fats, 0.4 percent from 0.5 percent; and
d. Ready-made food and other food products n.e.c., 6.4 percent from 7.8 percent.
In contrast, the following commodity groups registered higher inflation rates during the month:
a. Corn, 30.6 percent from 27.7 percent;
b. Milk, other dairy products and eggs, 3.2 percent from 3.5 percent; and
c. Fruits and nuts, 7.7 percent from 5.8 percent;
Meanwhile, the index of sugar, confectionery and desserts posted a slower annual decline of 5.3 percent during the month from 5.4 annual decline in the previous month.
2.2 Main Contributors to the Food Inflation
Food shared 62.3 percent or 2.1 percentage points to the overall inflation in August 2024. The top three food groups in terms of contribution to the food inflation during the month were the following:
a. Cereals and cereal products, which includes rice, corn, flour, bread and other bakery products, pasta products, and other cereals, with 83.5 percent share or 5.2 percentage points;
b. Meat and other parts of slaughtered land animals with 14.7 percent share or 0.9 percentage point; and
c. Vegetables, tubers, plantains, cooking bananas and pulses with 7.0 percent share or 0.4 percentage point.
C. By Province
Among the provinces and Highly Urbanized Cities (HUCs) of Central Visayas, all provinces and HUCs recorded slower year-on-year growth rates this month compared to the previous month’s inflation rates. (Table A, Figure 3)
TECHNICAL NOTES
The Philippine Statistics Authority generates and announces the monthly Consumer Price Index (CPI) based on a nationwide survey of prices for a given basket of goods and services. Two important indicators, the inflation rate and purchasing power of the peso (PPP), are derived from the CPI which are important in monitoring price stability and the value of the country’s currency.
The CPI is an indicator of the change in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
Retail Price is the price at which a commodity is sold for spot in small quantities for consumption.
Base Period/Base Year is the period, usually a year, at which the index number is set to 100. It is the reference point of the index number series.
Market Basket is a term used to refer to a sample of goods and services that are commonly purchased and bought by an average Filipino household.
Weight is a value attached to a commodity or ground of commodities to indicate the relative importance of that commodity or group of commodities in the market basket.
Inflation Rate is equivalent to a decline in the purchasing power of the peso. It is the change in the CPI over a specific period of time (usually a month or a year). That is,
Inflation Rate=(CPI2 – CPI1)/CPI1 *100
where:
CPI1 - is the CPI in the previous period
CPI2 - is the CPI in the current period
The Purchasing Power of the Peso (PPP) is a measure of the real value of the peso in a given period relative to a chosen reference period. It is computed by getting the reciprocal of the CPI and multiplying the result by 100. That is,
PPP= 1/CPI*100
Headline Inflation is the rate of change in the weighted average prices of all goods and services in the CPI basket.
Approved by:
(SGD.)
ARIEL E. FLORENDO
Regional Director
